ILLINOIS POLLUTION CONTROL BOARD
May 9,
1991
SPARKLING SPRING MINERAL
)
WATER.CO.,
Petitioner,
v.
)
PCB 91—9
(Underground Storage Tank
ILLINOIS ENVIRONMENTAL
)
Reimbursement)
PROTECTION AGENCY,
Respondent.
MR. GLENN M. WAGNER, PRO SE, APPEARED ON BEHALF OF PETITIONER.
MR. RONALD
L. SHALLAWITZ APPEARED ON BEHALF OF RESPONDENT.
OPINION AND ORDER OF THE BOARD
(by N. Nardulli):
This matter comes before the Board
on a petition for review
filed
January
17,
1991,
by petitioner
Sparkling
Spring Mineral
Water Company (Sparkling Spring)
pursuant to Section 22.18b(g)
of
the Environmental Protection Act (Act).
(Ill. Rev. Stat. 1989,
ch.
111
1/2,
par.
1022.18b(g).)
Sparkling
Spring
challenges
the
Illinois Environmental Protection Agency’s
(Agency) determination
that
Sparkling
Springs’
application
for
reimbursement
for
corrective action costs from the Underground Storage Tank Fund (UST
Fund)
is subject to a $50,000 deductible.
A hearing was held on
April
2,
1991
in
Waukegan,
Illinois at
which no members
of the
public attended.
FACTS
Sparkling Spring bottles and distributes water taken from a
well
on
its property
at
1629
Park
Avenue
West,
Highland
Park,
Illinois.
On
December
3,
1990,
the Agency
received Sparkling
Springs’ application for reimbursement for corrective action costs
incurred
in the removal
of two underground
storage tanks
(UST).
(R.
3_g)1
The application provides that on July 8,
1990, sparkling
Spring removed
a 1,000 gallon tank which had contained gasoline,
that the release was a “tank system leak”,
that the tank had been
taken
out
of
service
prior
to
1972
because
a
larger
tank was
installed adjacent to the 1,000 gallon tank and that the reasons
the tank was removed was age
of the tank and lack of
liability
insurance.
(P.
7)
The application
also provides that
a 2,000
gallon diesel oil tank was removed July 12,
1990 because the tank
1
R.
denotes citation to the Agency Record and TR.
denotes citation to the hearinq transcripts.
122—115
2
was leaking due to
a “tank
system leak”
and
that this tank was
taken out of service on February
1,
1988 because of its age and
lack of insurance.
(R.
6)
On December 14,
1990, the Agency issued a letter stating that
the
1,000
gallon
tank had not been
registered
and,
therefore,
corrective
action
costs
associated with
this tank could
not be
reimbursed
(Ill.
Rev.
Stat.
1989,
ch.
111
1/2,
par.
1022.18b(a)(4)).
(R. 22-23)
Regarding the 2,000 gallon tank, the
Agency
applied
Section
22.l8b(d) (3) (C)
(ii)
of
the
Act
and
determined
that
Sparkling
Spring
had
actual
or
constructive
knowledge of the release prior to July 28,
1989 because Sparkling
Spring
stated
in its application that the tank was taken out of
service
in
February
of
1988
and
was
Leaking
when
removed.
Therefore,
the
Agency
applied
a
$50,000
deductible
to
the
corrective action costs associated with the 2,000 gallon tank.
On January 17,
1991, sparkling Spring filed its petition for
review
challenging
the
Agency’s
decision.
Sparkling
Spring
included
with
its
petition
a
“corrected
application”
for
reimbursement.
This corrected application provided,
inter alia,
that the
release
from
the
2,000
gallon tank was
a
“product
of
overfill” and deleted the statement that the tank was leaking when
pulled.
On February 1,
1991, the Agency filed a motion for summary
judgment asserting that there were no genuine issues of material
fact and that, as
a matter of law, the Agency’s decision should be
affirmed.
On March 14,
1991, the Board granted the Agency’s motion
as to the 1,000 gallon tank, but denied the motion as to the 2,000
gallon tank; therefore, the instant matter concerns only the larger
tank.
At
hearing,
Sue
Dwyer
of
the
Office
of
the
State
Fire
Marshal’s Division of Petroleum and Chemical Safety testified that
she did not observe any “visible corrosion holes that would cause
leakage” in the 2,000 gallon UST.
(Tr.
6,
12)
She also testified
that
the
tanks
were
removed
in
two
separate
excavations
approximately
ten
feet
apart,
that
the
1,000
gallon
tank
was
“riddled with holes” and that there was visible contamination
in
the excavation but that she could
not remember which excavation
site was contaminated.
(Tr.
12—13)
Ray Branainan, Division Manager for Sparkling Spring, testified
that
he was
involved with
the removal
of
the
USTs.
(TR.
19)
Branaman testified that he first became aware of a release from the
2,000
gallon UST when the tank was pulled and contamination was
visible
on
the
“walls
of
the
hole”.
(Tr.
22)
According
to
Branaman,
“there
was
(sic)
no holes
in the tank because we had
the on site
(sic)
tank that had to pump the water out of the tank
and there was I’m going to say 800 gallons or 700 gallons of used
left—in fuel that we didn’t take out of there.”
(Tr.
23)
Branaman
testified that Sparkling Spring did not receive any complaints from
neighbors which would indicate the possibility of a leak.
(Tr. 23)
122—116
3
Regarding the corrected application, Branaman testified that
he
assumed
that
the
tank
was
leaking
because
of
the
soil
contamination, but that after speaking with Sue Dwyer,
Sparkling
Spring concluded that it had incorrectly stated in its application
that the tank was leaking when removed.
(Tr.
32)
When asked to
explain the source of the contamination,
Branaman explained that
“when the
delivery)
tanker
comes to
fill the
tanks there could
have been an overfill on a tank which would produce a flow of fuel
out of the spout that goes into the tank which depending on the
amount of spill
..~
if it absorbed right in the ground
I would not
see that.”
(Tr.
34)
Branainan testified that Sparkling Spring was
required to place diesel orders of 2,000 gallons and that the tank
was not always empty when the new delivery arrived.
(Tr.
40)
Branaman also testified that over fills
of two to
three gallons
could occur when filling Sparkling Springs’ trucks.
(Tr. 41)
The
tank pump did
not have an
automatic
shut-off nozzle.
(Tr.
42)
Branaman stated that no deliveries of diesel
fuel were accepted
into the tank after February
1,
1988 and that the contamination
must have occurred prior to that date.
(Tr.
37,
38)
Ronald
Schallawitz
testified
on
behalf
of
the
Agency.2
Schallawitz explained the Agency’s determination to apply a $50,000
deductible to Sparkling Spring’s claim.
(Tr.
51-56)
When asked
whether the Agency’s determination would be the same in
light of
the
corrected
application
and
testimony
presented
at
hearing
regarding contamination from overfill, Schallawitz opined that the
Agency’s determination would be the same.
(Tr.
56—58,
60—64)
DISCUSSION
Before
addressing
the
merits,
the
Board
must
address
the
Agency’s
continuing
objection
to
the
hearing
officer’s
ruling
admitting
two
exhibits
into
evidence.
Exhibit
1
is
a
soil
excavation project report prepared by Air Quality Testing,
Inc.
(Pet.
Ex.
1)
Exhibit
2
is
a letter from the Highland Park Fire
Department dated April
2,
1991 stating that from 1987 to the date
of the
letter the
fire department had not responded to any UST
related occurrences at the site.
(Pet.
Ex.
2)
The Agency objected
to the introduction of this evidence because
it was not included
with the application for reimbursement.
(Tr.
16-18)
The Agency
relies upon the general rule in permit appeals that the application
package must demonstrate compliance with the Act and,
therefore,
the Board reviews the denial of
a permit or imposition of permit
2
Glenn
Wagner
appeared
pro
se
on
behalf
of
Sparkling
Spring
and
called
Ronald
Schallawitz,
the
Agency
attorney,
as
a
witness.
Schallawitz
testified while
recognizing that such
a procedure was rather
unusual
given the difficulty of cross-examining one’s self.
(Tr.
48)
122—117
4
conditions based
on the application as
submitted to the Agency.
(Joliet Sand
& Gravel v. PCB, 163 Ill. App. 3d 830,
516 N.E.2d 955,
958
(3d Dist.
1987).)
However, the Board is hesitant to strictly
apply
this
rule
in
UST
matters
where
no
regulations
exist
identifying
the
type
of
information
necessary
to
complete
an
application
for
reimbursement
as
exist
for
permit
applicants.
Moreover, it appears that Sparkling Spring introduced this evidence
in response to the Agency’s statement
in its motion
for summary
judgment that Sparkling Spring gave no evidence such as “evidence
that no release was reported to the local fire department” or that
“the excavation
for the 2,000
gallon tank adjacent to the
1,000
gallon tank was not done in contaminated soil” to show that it did
not have knowledge of the release.
(Agency Mot. Sum. Judg.
at 8.)
Therefore, the Board affirms the hearing officer’s ruling admitting
Sparkling Spring’s exhibits.
The primary issue is whether the Agency correctly determined
that
Sparkling
Spring’s
application
for
reimbursement
for
corrective action costs is subject to a $50,000 deductible pursuant
to Section 22.l8b(d) (3) (C) (ii) of the Act because Sparkling Spring
had actual or constructive knowledge of the release from the 2,000
gallon UST prior to July 28,
1989.
(Ill. Rev. Stat.
1989,
ch.
111
1/2,
par.
l022.l8b(d) (3) (ii).)
Section
22.18b(d) (3) (C) (ii)
provides that:
If the costs incurred were
in response to a release of
petroleum which first occurred prior to July 28,
1989,
and the
owner
or operator had actual
or constructive
knowledge that such a release had occurred prior to July
28,
1989,
the deductible amount under subparagraph
(A)
of paragraph
(3)
shall be $50,000 rather than $10,000,
unless subparagraph
(B) (i)
applies,
in which case the
deductible
amount
shall
be
$100,000.
If
the
costs
incurred were in response to a release of petroleum which
first occurred prior to July 28,
1989, but the owner or
operator had
no actual
or constructive knowledge that
such a release had occurred prior to July 28,
1989,
the
deductible amount shall be as provided under subparagraph
(A)
or
(B)
of paragraph
(3)
of
this
subsection
(d),
whichever is applicable.
It shall be the burden of the
owner
or operator to prove
to the satisfaction of the
Agency
that
the
owner
or
operator
had
no
actual
or
constructive knowledge that the release of petroleum for
which a claim is submitted first occurred prior to July
28,
1989.
The Board
notes
that
the
circumstances presented
here are
unusual
in
that
Sparkling
Spring’s
factual
basis
for
claiming
reimbursement changed from the filing of the
initial application
to the filing of the corrected application with its petition for
review and hearing.
In
its initial application, Sparkling Spring
stated that the tank was removed because it was leaking and checked
112—118
5
the line on the
form identifying the release
as
a
“tank
system
leak.”
(R.
6)
In
its corrected
application,
Sparkling Spring
deleted the statement that the tank was removed because
it was
leaking and identified
the release
as
“a
product
of
overfill.”
(Resp. Ex.
7)
Other than objecting to the two exhibits discussed
above,
the Agency does not object to the filing of the corrected
application merely argues
that,
regardless
of which version
of
events is applied,
its deductible determination remains the same.
Hence,
the Board will review the Agency’s determination in light
of that evidence relied upon by Sparkling Spring in its corrected
application and at hearing.
The record establishes that there were no observable holes in
the 2,000 gallon UST upon removal on July 12,
1990.
However, the
record also establishes visible soil contamination on the sides of
the
excavation
hole
where
the
UST
was
located.
Mr.
Branaman
testified that there was spillage and overflow from both filling
the
UST
and
from
filling
Sparkling
Spring’s
delivery
trucks.
Branaman also testified that there was no automatic shut-off nozzle
to prevent overflow.
Lastly, Sparkling Spring established that the
UST was installed in 1971
(P.
6; Resp.
Ex.
7)
and that it stopped
using the UST on February
1,
1988.
Here,
the record establishes that the
spills and overflows
from the UST occurred on or before February 1,
1988.
Sparkling may
not have understood that the piping was part of the UST or that the
overflow and spilling constituted
a release as defined by the Act.
However,
USTs are defined to include all piping connected to the
tank
and
release
includes
any
spilling,
leaking,
emitting,
discharging,
escaping,
leaching
or
disposing
from
an UST
into
groundwater, surface water or subsurface soils.
(35 Ill. Adm. Code
731.112.)
Sparkling
Spring’s
misunderstanding
as
to
the
UST
provisions does not relieve
it
from the $50,000
deductible.
The
Board finds that Sparkling Spring had constructive,
if not actual,
knowledge that the release occurred prior to the deductible cut-
off date of July
28,
1989.
(Ill.
Rev.
Stat.
1989,
ch.
111
1/2,
par. l022.l8b(d)(3)(C)(ii).)
Therefore,
the Board concludes that
the Agency correctly determined that Sparkling Spring’s claim for
reimbursement from the UST Fund is subject to a S50,000 deductible.
The
Board
finds
that
the
Agency’s
ultimate
determination
should be upheld, although for different reasons than those stated
by the Agency in its December 14,
1990 final determination letter.
Consequently, it would be a waste of both administrative resources
and Sparkling Spring’s resources to remand this matter in light of
evidence
not
presented
to
the
Agency
with
the application
for
reimbursement.
Remand
would,
however,
be
the normal
procedure
followed by the Board because Section 22.l8b(d) (3) (C) (ii) provides
that the burden is on the owner or operator to prove to the Agency
that it did not have knowledge of the release.
(Ill. Rev.
Stat.
1989,
ch.
111 1/2,
par.
l022.l8b(d) (3) (C) (ii).)
In light of Wells
Manufacturing Co.
v.
IEPA,
195
Ill.
App.
3d 593,
552 N.E.2d 1074
122—119
6
(1st Dist.
1990), the Board is concerned with the use of a form for
applicants
seeking reimbursement where
the deductible provision
based
on
actual
or
constructive
knowledge
of
the
release
is
involved.
(Ill.
Rev.
Stat.
1989,
ch.
111
1/2,
par.
1022. 18b(d) (3) (C) (ii).)
When an applicant seeking reimbursement
receives an “Application for Reimbursement” form from the Agency
and completes the form and answers
form question 8(c)
“Date UST
taken out
of
service” with
a
date prior to July
28,
1989,
the
Agency imposes the “knowledge of the release deductible” provision
of Section 22.28b(d) (3) (C) (ii) of the Act, which is higher than the
general deductible
amount,
simply because the date taken out of
service is prior to July 28, 1990.~
The
problem
with
this
procedure
is
that
the
applicant
submitting the Agency’s form must anticipate that the “knowledge
of the release” deductible will be applied and that its only chance
to submit documentation to rebut
this
finding and
prove
to the
Agency that it did not have knowledge of the release
is with the
filing
of
the
application
for
reimbursement
form.
The
form
provided by the Agency coupled with the
failure to provide
the
applicant the opportunity
to protect
its interest
at the Agency
level
appears to be inconsistent with Wells.
Additionally,
the
failure to provide the opportunity to submit information showing
lack of knowledge
in response to the Agency’s determination that
the
“knowledge of the release” deductible applies,
such that the
applicant must present
this
evidence
for
the
first
time at the
Board
level,
is
inconsistent
with
the
provision
in
the
Act
requiring that the applicant prove
to the Agency that
it did not
have knowledge
of
the
release
prior
to
July
28,
1989.
While
recognizing that both the Agency and the Board interpret the permit
provision time-deadlines to apply to UST matters,
the Agency may
wish to utilize a procedure akin to the discretionary request for
more
information
used
in
permit
matters
when
applying
the
“knowledge of the release” deductible provision.
Such a procedure
would give the applicant the opportunity to submit information of
knowledge of the release to the Agency, thereby allowing the Agency
to review this information prior to rendering a final deductible
determination.
This constitutes the Board’s findings of fact and conclusions
of law in this matter.
While the Board need not rule upon the propriety of this
presumption in reaching its determination,
it questions
the merit of this presumption particularly where, as in
the instant case, there is no reason to presume that the
tank leaked prior to July 28, 1989 as opposed to between
July
28,
1989
and
July
12,
1990
when
the
tank
was
removed, particulary where the record establishes that
the tank contained 700-800 gallons of fuel and water when
removed.
(TP.
23)
122—120
7
ORDER
For the foregoing reasons,
the Agency’s determination that
Sparkling Spring’s claim for reimbursement
for corrective action
costs associated with its 2,000 gallon diesel UST is subject to a
$50,000 deductible is affirmed.
IT IS SO ORDERED.
Section
41
of
the Environmental
Protection Act
(Ill.
Rev.
Stat.
1989,
ch.
111
1/2,
apr.
1041)
provides
for the appeal
of
Final Board Orders within 35 days.
The Rules of the Supreme Court
of Illinois establish filing requirements.
I,
Dorothy M.
Gunn,
Clerk of the Illinois Pollution Control
Board,
h
eb
certify that the above Opinion and Order was adopted
on the
____
day of
~f))(
,l99l,
by a vote of
7—,~)
~
/~~J
Dorothy N. G~?, Clerk
Illinois Pollü~ionControl Board
122—121